December 17, 2015 / 3:00 AM / 2 years ago

BUZZ-Asian EMs rise; dovish Fed may boost risk appetite, flows

** Asian EMs see relief as dovish Fed outcome, base case for most, may boost risk appetite and stabilise flows

** Asia policymakers relieved as markets absorb Fed hike and its emphasis on gradual path

** MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.9 percent.

** China’s CSI300 up 1.9 pct, Kospi up 0.4 pct, Taiwan’s index rises 1.2 pct, Jakarta Composite gains 1.2 pct and SGX Nifty futures points to positive start for Indian shares

** U.S.-based emerging market ETFs stage relief rally after rate hike

** Impact on EM equities and currencies from Fed’s normalisation is mostly priced in - analysts

** EM assets to recover some of the lost ground, given attractive valuations following the Fed’s fairly smooth lift-off, though differentiation still remains paramount - HSBC

** Differentiation important given weak EM fundamentals like poor growth, high USD debt, collapsing commodity prices, political and geopolitical issues

** Capital flows to EM may stabilize at around $500 bln in 2016, or slightly below 2 pct of EM GDP, close to our 2015 estimate - HSBC (RM:

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